The defendant/shipowner owned the Leni and voyage chartered it to Transworld Oil Ltd. The charterparty provided that all bills of lading issued under the charterparty were subject to the Carriage of Goods by Sea Act 1971 (UK) (the Act) and the rules scheduled to the Act (ie the Hague-Visby Rules (H-VR)). The vessel loaded crude oil at Jebel Dhanna, United Arab Emirates. The bill incorporated the terms of the charterparty and was eventually indorsed in favour of Transworld Oil America Inc or its order. The oil was discharged in October 1986 in the Bahamas. Short delivery was alleged for the oil and other cargo loaded elsewhere under another bill.

In September 1987, four plaintiffs issued the writ in the present action. However, Transworld Oil America Inc was mistakenly not included as a plaintiff. Before service of the writ, it was amended to delete all plaintiffs other than Transworld Oil (USA) Inc. The time provided by H-VR art 3.6 for commencing suit expired on 9 October 1987. In 1991, the plaintiffs applied to add Transworld Oil America Inc as a plaintiff by way of amendment.

The first question was whether if the suit was brought within time but in the name of a plaintiff who had no title to sue, the carrier was discharged from liability under H-VR art 3.6 to the party who does have title to sue. The second question was whether, if liability was so discharged, permission should nevertheless be granted to add Transworld Oil America Inc.

It was undisputed that the H-VR as enacted by the Act was contractually incorporated into the bills. The plaintiffs conceded that Transworld Oil (USA) Inc had no title to sue but argued that the claim of Transworld Oil America Inc was not time-barred as suit had been brought within time. It was a gloss on art 3.6 to suggest that no suit is brought if it is mistakenly brought in the name of the wrong plaintiff. In contrast, the owners argued either that the suit must be brought by the plaintiff within time or, alternatively, if suit brought by some other party may suffice, that the suit must have been brought by a competent plaintiff ie a plaintiff with title to sue. In either case, the claim of Transworld Oil America Inc was time-barred because the owners had been discharged from liability.

Held: Application dismissed.

Both questions were answered in favour of the owner. The H-VR are statutorily applicable and not merely by contract: H-VR art 10.c and s 1(6)(a) of the Act.

On the first question, the Court ultimately held that art 3.6 of the H-VR afforded a substantive defence because 'suit' in art 3.6 means 'suit brought by the person properly entitled to bring it' (Compania Colombiana de Seguros v Pacific Steam Navigation Co Ltd [1965] 1 QB 101, 129 (Compania Colombiana); The Nordglimt [1988] QB 183, 192–193) (CMI2230) and a suit 'in which the right to sue on the contract is vested in the plaintiffs' (Central Insurance Co Ltd v Seacalf Shipping Corporation (The Aiolos) [1983] 2 Lloyd's Rep 25 (CA) 30). To stop the art 3.6 time-bar, a suit must be brought within the year by a competent plaintiff in a competent Court: The Nordglimt (generally approved in Government of Sierra Leone v Marmaro Shipping Co Ltd (The Amazona) [1989] 2 Lloyd's Rep 130 (CA)).

The Court declined to follow the first ground of decision in Compania Colombiana 126, where it was held that in considering the application of art 3.6, the issue to be determined 'is whether the action before the court, and not some other action, has been instituted within the relevant limitation period'.

This first ground of decision was thought of being incapable of universal application: Hispanica de Petroleos SA v Vencedora Oceanica Navegacion SA (The Kapetan Markos NL) [1986] 1 Lloyd's Rep 211 (CA) 231. The Nordglimt 191 refused to apply this ground of Compania Colombiana and preferred the test formulated in The Kapetan Markos NL 232, where the proper construction of art 3.6 was considered:

If, therefore, a shipowner wishes to rely on the r. 6 discharge from liability he must establish first that the goods were carried under a contract of carriage by sea, next that suit to establish liability under the rules in respect of loss of or damage to the goods carried under the contract has not been brought within a year.

The Nordglimt should be followed and preferred over the first ground of decision in Compania Colombiana, which has been criticised and doubted: The Amazona 135; The Kapetan Markos NL. It is important in construing private law Conventions which are seldom drafted in wholly unambiguous language that this Court should give a consistent interpretation to the Convention in succeeding cases. Otherwise, commercial uncertainty would arise.

The Kapetan Markos NL is an important case on art 3.6 for two reasons. First, it analyses the art 3.6 defence in a way which is not dependent on ascertaining what cause of action (as that concept is understood in English procedural law) has been raised in a suit begun within the year. Second, it sets out the test for ascertaining whether a shipowner can rely on the art 3.6 discharge from liability.

The plaintiffs relied on The Kapetan Markos NL 232 and argued that suit in the present case to establish liability under the rules in respect of loss of the goods carried under the relevant contract of carriage by sea, had been brought within the year. This argument was rejected. The Kapetan Markos NL did not have to consider whether there might be cases where the suit must be treated as so incompetent that it must be disregarded. That question was considered in The Nordglimt.

Although neither party cited foreign authority on art 3.6, Firestone Plantations Co v USA [1945] AMC 746 (ND Ohio 1945) (Firestone) was cited in both Raoul Colinvaux, Carver on the Carriage of Goods by Sea, vol 1 (13th edn, Stevens & Sons 1982) (Carver) para 524 note 52 and William Tetley, Marine Cargo Claims (3rd edn, Blais 1988) (Tetley) 687 note 87. Carver stated that 'in the United States that the proper plaintiff need not serve within the year provided someone interested in the goods at some stage of the carriage does'. But Firestone's judgment is scarcely longer than a paragraph.

The owner also argued that if it were held to be sufficient for the purposes of art 3.6 that suit had been brought within a year on the relevant contract of carriage, in respect of the relevant claim and in a competent Court, and that it was not necessary for the action to have been brought by a party who had title to sue, the question whether a plaintiff could maintain an action against the carrier would be governed at least in part, by the national law of the Court seized of the case, and this would detract from one of the purposes of art 3.6, which was to achieve international uniformity in relation to prescription periods. Nevertheless, no construction of art 3.6 produces results which will be entirely satisfactory in all cases, and art 3.6 refers to the discharge of the carrier from all liability whatsoever in respect of the goods and not to the discharge of the carrier as regards liability to particular plaintiffs.

Had there been no authority on the meaning of art 3.6, the Court would have concluded that art 3.6 afforded no defence to the claim and would have granted permission to the plaintiffs to amend their claim.

A statute enacted to give legal force to a private law Convention should be construed in its international context, unconstrained by technical rules of English law, or by English legal precedent but on broad principles of general acceptation; further that it should be construed so as to give effect to the purposes which the Convention was designed to achieve: Stag Line Ltd v Foscolo Mango & Co Ltd [1932] AC 328 (HL) 350; James Buchanan & Co Ltd v Babco Forwarding and Shipping (UK) Ltd [1978] AC 141 (HL); Fothergill v Monarch Airlines Ltd [1981] AC 251 (HL).

A Protocol signed in Brussels in 1968 (the Visby Protocol) effected certain technical amendments to the Hague Rules. Two problems, not relevant to this case, had arisen in connection with the fourth paragraph of art 3.6. Article 2 of the 1968 Protocol provides that the fourth paragraph shall be replaced by the following:

Subject to paragraph 6 bis the carrier and the ship shall in any event be discharged from all liability whatsoever, in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen.

The Act provides by ss 1(1) and 1(2) that the H-VR, as scheduled to the Act, 'shall have the force of law'. The Schedule of the Act correctly sets out the English text of the Hague Rules art 3.6 as amended by the Visby Protocol, save that the second para has been omitted. No significance attaches to this.

In the absence of authority, the fourth para of art 3.6 could be construed in the following way. First, there is a close connection between the 'notice-of-claim' and the 'time-for-suit' provisions set out in art 3.6. Both form one subject matter and are dealt with together.

Second, the context and purpose of the Hague Rules must be accounted for. Before 1924 there had been no statutory control in the UK of bill of lading clauses with the result that shipowners had been able to introduce exceptions clauses relieving them from an ever-increasing range of liabilities. Legislatures overseas had already intervened: see eg the Harter Act 1893 (US); Water Carriage of Goods Act 1910 (Canada). Among the clauses that had been permitted at common law in England and even in the US and Canada under pre-existing legislation had been contractual provisions barring claims unless written notice of the claim had been given before removing the goods from the carrier's custody or unless suit had been filed within periods as short as 30 or 60 days after delivery of the goods: Michael Sturley, 'The History of COGSA and the Hague Rules' (1991) 22 JML & C 1, 23. The purpose of the Hague Rules was to achieve a compromise balancing the interests of cargo owners and carriers. There were several objectives which art 3.6 sought to achieve. First, to speed up the settlement of claims and to provide carriers with some protection against stale and therefore unverifiable claims. Second, to achieve international uniformity in relation to prescription periods. Third, to prevent carriers from relying on 'notice-of-claim' provisions as an absolute bar to proceedings or from inserting clauses in their bills of lading requiring proceedings to be issued within short periods of less than one year: Tetley 671 n 1. After 1924 the only effect of the carefully negotiated and complex 'notice-of-claim' provision would concern the burden of proof. The 'time-for-suit' provision would replace and standardise the clauses previously contained in carriers' bills of lading.

Third, art 3.6 protects the carrier if certain steps are not taken within the prescribed time; eg if notice of claim is not given before the removal of the goods or if suit is not brought within one year of delivery. Article 3.6 does not specify who is to take those steps because the carrier will be equally put on notice as to the existence of the claim and equally able to investigate and deal with it irrespective of the identity of the party by whom those steps are taken. The wording of art 3.6 is quite general and apparently free from technicality.

All that is necessary under art 3.6 to preserve a claim is that a suit must have been brought to enforce the claim within the one-year period. That suit must be one to enforce a claim in respect of loss or damage arising under a 'contract of carriage' as defined in H-VR art 1.b (also referred to in art 2). Provided that the suit has been brought in time and has been brought to enforce a claim arising under the particular contract of carriage in question, prima facie the carrier is not discharged from liability under art 3.6.

There may be cases where, although a 'suit' has been brought in time and has been brought in respect of the right claim and the right contract of carriage, the suit must be disregarded. If the suit has been brought in a Court which obviously has no jurisdiction, the suit might be regarded as though it had never been brought at all.

But a suit should not be treated as a 'non-suit' merely because it has been brought in the name of a party who, it subsequently turns out, has no title to sue in respect of the particular contract of carriage in respect of which the suit has been brought. Such a suit is not a nullity. It is not possible to say that the suit is irremediably incompetent to determine the claim if the Court in question has power under its procedure to amend the proceedings to enable the proper party, ie the party having title to sue, to be joined as plaintiff. The position is different from a case where the Court in which the suit has been brought has no jurisdiction.

If art 3.6 had been intended to operate to bar claims where suit had not been brought within the one-year period either by the plaintiff or by the party who had title to sue, then art 3.6 would say so. There is no basis for implying into art 3.6 'unless suit is brought by the party entitled to bring that suit'. Neither the background to the Hague Rules nor the wording of art 3.6 itself would require such implication to be made. Moreover, it is contrary to the purpose of the Hague Rules and to the wholly untechnical wording of art 3.6 that the carrier should be entitled to be discharged from liability merely because it is discovered at an interlocutory stage of proceedings which have been timeously commenced that those proceedings have been brought in the name of the wrong plaintiff, a matter which is prima facie remediable and which is likely to have caused no prejudice to the carrier in investigating the claim.

On the second question, the Court completely rejected the plaintiffs' argument that if the claim is barred by art 3.6, the Court nevertheless has jurisdiction under RSC O 20 r 5(3) to join Transworld Oil America Inc as a plaintiff; and such joinder would overcome the time bar, and that the Court should exercise its discretion to allow the amendment. The Court expressed general agreement with Zainalabdin Payabi v Armstel Shipping Corp (The Jay Bola) [1992] 2 Lloyd's Rep 62 (CMI2049), which considered the authorities in detail.

Unlike other time bars, art 3.6 provides a substantive time-bar defence that extinguishes the claim such that it ceases to exist: Aries Tanker Corp v Total Transport Inc (The Aries) [1977] 1 WLR 185 (HL) 188 (CMI2194). Thus, the claim ceased to exist from 9 October 1987 onwards. It cannot be resurrected. The Court does not override but gives effect to substantive defences. The Court has no discretion to override a defence arising under the H-VR because international legislation does not confer such discretion. The H-VR apply internationally not only where: (i) a bill of lading is issued in a contracting State and (ii) where the carriage is from a port in a contracting State; but also (iii) where parties to a contract of carriage voluntarily incorporate in a bill of lading either the HV-R or legislation giving effect to the H-VR: art 10.c.

There are three reasons why permission should not be granted to amend the writ when the claim of Transworld Oil America Inc is barred by art 3.6. First, the Rules of the Supreme Court do not, and cannot, confer power on the Court to override substantive time bars: Supreme Court Act 1981 (UK) s 84: The Jay Bola. Secondly, such amendment is pointless as the claim would still be extinguished by art 3.6: Liff v Peasley [1980] 1 WLR 781 (CA) (Liff); Ketteman v Hansel Properties Ltd [1987] AC 189 (HL) (Ketteman). Where the amendment involves the addition of a new party the amendment does not relate back to the original date of the document amended: Liff 803; Ketteman. See also Limitation Act 1980 (UK) ss 35, 39. Thirdly, the Court will not allow a person to be added as a party to an action if the effect of so doing will be to deprive the defendant of a time-bar defence: Mabro v Eagle Star and British Dominions Insurance Co Ltd [1932] 1 KB 485, 487; Lucy v WT Henley's Telegraph Works Co Ltd [1970] 1 QB 393 (CA) 411–412; Liff; Ketteman.

Furthermore, overriding the art 3.6 defence is contrary to the H-VR and would put the UK in breach of its obligations under the H-VR. A State which becomes a party to a private law Convention thereby undertakes an obligation to the other contracting States to ensure that its laws conform with that Convention. If the laws of part of the UK confer power on this Court to exercise a discretion which, if exercised, would deprive a carrier of one of the 'rights and immunities' referred to in art 3, the Court should exercise that discretion so that domestic law conforms with the H-VR in practice.

Finally, even if Court procedural rules for amendments override an art 3.6 substantive defence, applications must be made promptly. The plaintiffs' application was made over three years after the time-bar. No explanation was provided for such extreme delay. Discretion, if any exists, ought to be exercised against granting permission to add Transworld Oil America Inc as plaintiff.